British Offshore Drilling Activity Surge

A surge in offshore drilling activity in British waters shows renewed confidence in the offshore sector, according to a new report from accountants, Deloitte.

PRLog - Oct. 2, 2012 - GREAT YARMOUTH, U.K. -- They reported that eight new fields have come onstream to date this year across the North Sea, with activity rising year-on-year by 64% in the second quarter of 2012.

Deloitte, which documents drilling and licensing across north west Europe, found 18 exploration and appraisal wells were drilled on the UK Continental Shelf (UKCS) during the second quarter. The number of deals involving the sale of oil and gas fields also increased year-on-year by 46% in the last quarter.

Deloitte said the outlook for the UK oil and gas industry was "positive". Graham Sadler, managing director of Deloitte's Petroleum Services Group, said: "We traditionally experience a rise in activity during the summer months; however this year's spur of activity reflects a higher year-on-year increase. It is reasonable to assume that we will see an expansion on the exploration campaigns started during the last quarter”

Mr Sadler went on to say "We have some way to go before we are back to the levels seen in 2009 and 2010. However the positive announcements in the government's March Budget with regards to the extension and change in field tax allowances should encourage further exploration, appraisal and development activity".

He added: "Furthermore, the announcements made to provide more certainty on the decommissioning tax relief, if implemented, should allow companies to recover cash flow previously tied up in financial guarantees for further investment across the UKCS."

Mr Sadler said recent tax changes introduced by the UK government appeared to be encouraging companies to view the North Sea in a more positive light.

"While we will have to wait until next year to see the full impact, the highly competitive 27th Licensing Round is likely to trigger more exploration and appraisal commitment from companies who are putting down plans for the next two to three years," he said. "With an improved fiscal environment and steadily high commodity prices, it is reasonable to assume that we will see an expansion on the exploration campaigns started during the last quarter."